Why do companies like Apple, PlayStation, and Xbox, launch new hardware before they’ve manufactured enough to meet initial demand?
In: Economics
Imagine hearing that the PS5 is complete, and there are millions of them in warehouses around the world ready to go . . . but you can’t buy one for another 3 months because they don’t have enough to fully meet demand yet. People would be **pissed**.
But if Sony ramped up production high enough to meet initial demand quicker, they’d end up with factories that would stop being used once the initial peak demand was met, thus wasting hundreds of millions of dollars.
Plus, they benefit from having limited quantities, as it help drive hype.
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